Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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What is balanced economic growth?

Growth that occurs in specific sectors only
When all sectors of the economy expand simultaneously
Growth that is maintained at a steady rate
Uneven growth across various industries

The correct answer is: When all sectors of the economy expand simultaneously

Balanced economic growth refers to a situation in which all sectors of the economy expand simultaneously, ensuring that no particular area outpaces others significantly. This type of growth is essential for the overall health of an economy as it helps to prevent disparities between different sectors, which can lead to issues such as unemployment in lagging sectors or inflation in rapidly growing sectors. By achieving simultaneous growth across agriculture, manufacturing, services, and other areas, a balanced approach fosters stability, reduces the risk of economic volatility, and promotes a more equitable distribution of resources and opportunities. In this context, focusing on just specific sectors or experiencing uneven growth introduces imbalances that can create economic challenges. Steady growth, while desirable, does not necessarily imply that all sectors are benefiting equally, which is critical for achieving balanced economic health.